The North mostly covers the West and the First World, along with much of the Second World, while the South largely corresponds with the Third World. While the North may be defined as the richer, more developed region and the South as the poorer, less developed region, many more factors differentiate between the two global areas. 95% of the North has enough food and shelter. The Global South "lacks appropriate technology, it has no political stability, the economies are disarticulated, and their foreign exchange earnings depend on primary product exports." Nevertheless, the divide between the North and the South increasingly "corresponds less and less to reality and is increasingly challenged."
In economic terms, the North—with one quarter of the world population—controls four-fifths of the income earned anywhere in the world. 90% of the manufacturing industries are owned by and located in the North. Inversely, the South—with three quarters of the world populations—has access to one-fifth of the world income. As nations become economically developed, they may become part of the "North", regardless of geographical location; similarly, any nations that do not qualify for "developed" status are in effect deemed to be part of the "South".
The idea of categorizing countries by their economic and developmental status began during the Cold War with the classifications of East and West. The Soviet Union and China represented the East, and the United States and their allies represented the West. The term "Third World" was coined by states hoping to navigate between the two poles of the Cold War, and ultimately gave birth to the Non-Aligned Movement. These countries were generally less economically developed than their First- and Second-World counterparts. As some Second World countries joined the First World, and others joined the Third World, a new and simpler classification was needed. The First World became the "North" and the Third World became the "South".
Being categorized as part of the "North" implies development as opposed to belonging to the "South", which implies a lack thereof. According to N. Oluwafemi Mimiko, the South lacks the right technology, it is politically unstable, its economies are divided, and its foreign exchange earnings depend on primary product exports to the North, along with the fluctuation of prices. The low level of control it exercises over imports and exports condemns the South to conform to the 'imperialist' system. The South's lack of development and the high level of development of the North deepen the inequality between them and leave the South a source of raw material for the developed countries. The north becomes synonymous with economic development and industrialization while the South represents the previously colonized countries which are in need of help in the form of international aid agendas. In order to understand how this divide occurs, a definition of "development" itself is needed. Northern countries are using most of the earth resources and most of them are high entropic fossil fuels. Reducing emission rates of toxic substances is central to debate on sustainable development but this can negatively affect economic growth.
The Dictionary of Human Geography defines development as "rocesses of social change or to class and state projects to transform national economies". This definition entails an understanding of economic development which is imperative when trying to understand the north–south divide.